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Business Respect - CSR Dispatches No#114 - 14 Oct 2007

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An email newsletter with news and discussion focusing on corporate
social responsibility globally, looking at the companies in the news
and the emerging issues. Linked to the website at
http://www.mallenbaker.net and produced every two weeks.

In this issue, we consider the industries that will have the hardest
time adapting to climate change.

In the news:

1. China: Reports on Foxconn abuses suppressed
2. Finland: CSR beginning to be influential on consumer behaviour
3. Burma: Total resists pressure to withdraw
4. US: Toyota's green image in question
5. Siemens fined 210m euros over bribes
6. China: Major companies focus on fewer human rights
7. Canada: CEOs urge stronger action on climate change

Feature articles on the internet:

1. Winds of change beginning to blow - 12 Oct 2007 FROM Financial
Times / WBCSD
2. Is CSR for real? - 5 Oct 2007 FROM ABS-CBN

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Topics:

Welcome
CSR News 14 Oct 2007
CSR FEATURES from the internet
Recent entries from Mallen's blog
Climate change: A frontier made of cement and steel

Want to read a hyperlinked version of this issue? You can find one on
the website at http://www.mallenbaker.net/csr/nl/114.html.

Copyright 2007 Mallen Baker. All rights reserved. For information on how
to subscribe, go to http://www.mallenbaker.net/csr/nl/subscribe.html.

===================

Welcome

* I forgot to mention in the editorial last time that some exceptionally
kind, and to give them credit quick and well skilled, individuals
stole my laptop recently. OK, it wasn't backed up as recently as it
should have been, although recently enough not to be a disaster.
However, I know for a fact that there were a couple of weeks of emails
that hadn't all been answered yet, which I now can't recover.
Apologies if you were one of those that emailed and didn't hear back
from me.

One of the consequences of having lost some recent work however, was
that I had to cancel my attendance at the Asian Forum on CSR whilst we
were piecing things together again. My apologies to any that booked
onto the breakout session there who then found me absent, and also to
the organisers for not being able to do the citation for the awards.
All the reports I had of the event were excellent, so it was obviously
as well organised as usual.

OK - it really is time now to change the vote on the website. The
current vote is as follows:

Recent announcements by the big supermarkets about environmental
practices represent:
A real shift towards sustainable practice 375 (30%)
A small step only, with much more needed 551 (43%)
Nothing but cynical public relations 338 (27%)

Thanks to the 1264 people that voted!

The vote has now been changed to the following:

Which of these groups has done the most so far to respond to the
challenge of climate change?
1. Governments
2. Businesses
3. Citizens

See what you make of that!

Mallen Baker
mallen@mallenbaker.net

===================

CSR News

* China: Reports on Foxconn abuses suppressed

The Chinese government suppressed news reporting of the allegations of
poor working conditions at the Apple iPod factory run by Foxconn last
year, according to a new report from Reporters Without Borders.

The report claims that tens of thousands of Chinese police monitor the
activity of internet users and suggests that text messages are sent to
editors and Chinese news outlets directing them about how they should
handle certain stories.

According to Reporters Without Borders, this approach was used in the
case last year where allegations were made about working conditions at
Foxconn which became the subject of newspaper stories in the UK. The
coverage prompted Apple to launch its own investigation and to require
Foxconn to take remedial action.


* Finland: CSR beginning to be influential on consumer behaviour

Corporate social responsibility is beginning to be a influencing
factor in consumer behaviour in Finland according to a new TNS Gallup
survey.

In particular, around three quarters of consumers believe
environmental issues and employee treatment to be key areas that
demonstrated good business practice. Thirty five percent of
respondents said that a company's commitment to social responsibility
would affect their decision to buy its products.

The poll was commissioned by the Finnish daily newspaper Helsingin
Sanomat, and questioned over a thousand people.

Respondents named Valio, the dairy products company, as the one they
believed to be most socially responsible.


* Burma: Total resists pressure to withdraw

The CEO of Total, Christophe de Mangerie, has rejected calls from a
variety of sources, including the French President Nicolas Sarkozy, to
withdraw from Burma in the face of the recent violence there.

In an interview with French newspaper Le Monde, he said that the
company would continue to operate its gas field in Yadana and rejected
suggestions that the company was complicit in human rights abuses. He
said that the company had invested in the country back in the 1990s
and nothing had substantially changed since that time.

Other companies, such as Premier Oil, have in recent times pulled out
of Burma. Companies said by the Burma campaign to still be investing
in the country include Suzuki, AP Moller-Maersk and Hutchison Whampoa.


* US: Toyota's green image in question

Environmental campaign groups have criticised what they see as
resistance by Toyota Motor Corp to fuel economy proposals to be
considered by the US Congress. Other companies, such as Ford and
General Motors share the same public policy position, but Toyota has
attracted particular attention because of its more progressive track
record of producing greener cars, such as the Prius hybrid.

A lobbying campaign has been undertaken, with thousands of emails and
faxes bombarding Toyota urging the company to support the objective of
legislating for a 35 mile-per-gallon standard by 2020.

Toyota has said that the Senate bill would hurt the industry. It
supports the alternative proposal which would still raise the
standards by up to 40 percent and give motor manufacturers a more
achievable timeframe.


* Siemens fined 210m euros over bribes

Siemens has been fined following an investigation into payments of
bribes to gain contracts. The company also is to pay 179m euros in
back tax payments after having been found to have failed to declare
payments properly.

Allegations around bribery and corruption have seen a number of key
executives prosecuted and given suspended jail sentences or
probation.

The company has said that it accepts the verdict from the Munich
District Court, and will not seek further appeal.


* China: Major companies focus on fewer human rights

A new survey of the human rights policies of 25 major
internationally-focused Chinese companies has shown that the companies
recognise fewer human rights and at a lower level than their global
counterparts.

The survey, carried out on behalf of the UN Secretary General's
special representative on business and human rights, John Ruggie,
followed a similar, more broadly based, review of companies with
English language information available on their policies. It was
designed to fill in an acknowledged important gap - Chinese companies
that are in the forefront of importance in terms of global business
but which only have information predominantly in Mandarin.

Additional key findings included that Chinese companies, although
recognising fewer rights, express more frequent support for the right
to development than previous companies surveyed, and are more likely
to recognise social and economic rights amongst non-labour rights.

Amongst the sample of Chinese firms, the nine state-owned enterprises
recognise human rights at a higher rate than the others. Only two
companies reference reporting on human rights - both of which have
adopted the Global Reporting Initiative guidelines.

The most significant unknown factor related to the supply chain. Since
none of the companies surveyed address supply chain issues, it is
impossible to know whether these companies' commitments to human
rights extend beyond their own operations.


A link to this report can be found in the resources section of the
www.mallenbaker.net website.



* Canada: CEOs urge stronger action on climate change

A group of top Canadian chief executives has called for urgent action
on climate change, describing it as the "most pressing and daunting"
issue faced by the world today.

The group, acting through the Canadian Council of Chief Executives,
has produced a report that calls for government, business and citizens
to work together to make real reductions in emissions. It said that
the 'significant cost' of action should be shared by all sectors.

The CEOs said that businesses have already taken a lead in making
their operations more energy efficient, but government would need to
show that they would not be penalised for making key investments to
cut emissions and improve productivity. Positive government
intervention could come in the form of emissions trading systems, such
as that created by the Kyoto Protocol.


CSR FEATURES from the Internet

* 1. Winds of change beginning to blow - 12 Oct 2007 FROM Financial
Times / WBCSD

The world's biggest retailer is to ask all its suppliers to measure
their greenhouse gas emissions. One of the biggest supermarket chains
is to label all the products it sells to show how much carbon went
into their manufacture.

More than three-quarters of the biggest companies globally now monitor
and report regularly on their climatic impact, though no regulation
forces them to do so.


http://www.wbcsd.org/plugins/DocSearch/details.asp?type=DocDet&ObjectI
d=MjY2MjA


* 2. Is CSR for real? - 5 Oct 2007 FROM ABS-CBN

For the last few years, one popular business concept that has taken
the corporate world quite by storm is corporate social responsibility.
To those of us who had been around the block a few dozen times, we
couldn't help being a little sceptical that a) it is really that new;
b) it is here to stay and c) the big guys who are endorsing it at
Davos and other top level management conferences really know what it
is or could even truly care less.

http://www.abs-cbnnews.com/storypage.aspx?StoryId=94712


Recent entries from Mallen's blog

* Still arguing over the language - 9 Oct 2007

I had a lunch today with the recent author of one of those newspaper
articles that attacks the concept of CSR because - even though you
could cut the author's argument either way - the fact is that if you
can position your piece as anti the consensus

http://www.mallenbaker.net/blog/index.php#anchor44

==============================

* Climate change: A frontier made of cement and steel

Article by Mallen Baker

So, to the delight of some and the irritation of others, Al Gore has
been given the joint honour of the nobel peace prize, alongside the
IPCC. Both have had a huge part to play in raising awareness.
Awareness, however, is the easy part.

Last week the US Treasury Secretary Henry Paulson met with a group of
CEOs that have come together over support for a mandatory programme to
reduce greenhouse gas emissions. The companies, part of a coalition of
27 major companies including General Electric and General Motors, have
been arguing for a pollution trading programme. The Bush
administration, of course, is opposed to mandatory measures to reduce
greenhouse gas emissions. But even the Bush camp is seeing movement.

The corporate lobbying does not end there. GE's Jeffrey Immelt and
Duke Energy's Jim Rogers were amongst the CEOs that attended a
separate session at the White House with Bush's top environmental
advisor James Connaughton reportedly covering a wideranging
discussion. It is just another reflection of a factor we have seen
before - the business community is now ahead of many policy makers
when it comes to seeing the need for action.

In a number of areas, the environmental campaigners got there first.
But increasingly now the campaigns are distracted by highly visual
symbols (such as the airlines), or by anti-corporate sentiment.

So, shortly after eco-warriors camped outside the UK lead airport
Heathrow to protest against the growth in flying, CEOs of the cement
industry - a sector which produced more than 5 percent of the world's
man-made climate change emissions and more than the aviation industry
- quietly convened to review what they could do.

Cement is a key material - with soaring demand across the world and
therefore increasingly a huge challenge to the achievement of a
sustainable world economy. The material is inherently carbon
intensive. Its manufacture depends upon high temperature kilns, and
also contains chemical processes which lead to the release of carbon
dioxide.

Cement factories globally are expected to produce almost 5bn tonnes of
carbon dioxide every year by 2050.

There is no easy win here. Demand for cement is used for the roads,
schools, sewers and other infrastructure much needed by developing
countries in particular. Likewise, the carbon intensity is inherent to
the process - spectacular cuts are hard to envisage. But public
awareness of the sector is very low. The majority of people are
probably not even aware that cement production produces CO2.

Cement companies are beginning to take steps to do what they can.
Some, for instance, burn waste products alongside coal, whilst others
have tried to make plant more energy efficient. The companies that
came together, who have formed the Cement Sustainability Initiative,
are working to standardise such techniques and to share best
practice.

Big obstacles remain. China has become the largest single source of
cement-related emissions with the rapid growth of the sector there. No
Chinese cement companies have accepted invitations to join the
initiative. That said, neither have the US equivalents, and the
somewhat newer plant in China is generally more efficient than the
older US versions.

The other sector that remains particularly intensive is the steel
industry, which also accounts for around 5 or 6 percent of global
man-made greenhouse gas emissions, just slightly ahead of cement.

Steel is necessarily produced through furnaces, either a primary blast
furnace method or the electric arc furnace. Modern plant is certainly
more energy efficient that the old steel mills that until relatively
recently were still in operation, but it remains inherently a
polluting process. As with cement, the material output shows no sign
of being less important to future development.

Industries where there are few apparent opportunities to make energy
efficiency improvements are a challenge for public policy making. So,
for instance, the European companies covered by the EU Emissions
Trading Scheme see their future operation constrained by the policy.
The early years of the ETS have had little impact, since emission
permits were over-allocated. In future, the allocation will be
stricter. Companies say that without the ability to make their
processes more efficient, this will simply mean that the sector's
growth will be artificially constrained, and this will encourage a
surge of imports from countries where such constraints are not a
factor. This will produce neither sensible business outcomes, nor will
it do anything to address what is a global environmental problem.
Indeed, it would be likely to make them worse.

Ultimately, companies say that public policy should be designed to
ensure all companies follow existing best practice. The best global
gains would be gotten by upgrading plant in Russia - not by using
policy devices that might actually encourage imports from Russia
instead.

At the same time, they recognise that innovation is needed to make the
next step jump. The International Iron and Steel Institute is pursuing
the Ultra Low Carbon Steel product which has the ambitious target of
developing a solution that will reduce the process emissions by 50
percent.

What all of this is about is leadership. Companies that see the
writing on the wall, and engage governments to sharpen up their
response. Industry sectors that, relatively out of sight of the
campaigners, understand their shared ownership of the problem and have
focused on initiating now the innovation that will be needed tomorrow.

What it is not about, however, is easy wins producing easy solutions.
Whilst the campaigners focus on invoking guilt in the frequent flyers,
nobody can argue that the steel and the concrete that is so integral a
part of building infrastructure in countries that need to escape
poverty can be dealt with in such an easy fashion.




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